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TMI Blog2024 (6) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Service Tax Appellate Tribunal [CESTAT] within three months from the date on which the Order sought to be appealed against is communicated. It is in such backdrop, the rival contentions made by the parties are to be considered in the present writ petition. Availability of an alternative remedy does not operate as an absolute bar to the maintainability of a writ petition. It has, thus, been observed that entertainability and maintainability of a writ petition are distinct concepts. While an objection to the maintainability goes to the root of the matter, the question of entertainability is entirely within the realm of discretion of the High Courts. The issue involved in MAHARASHTRA CHESS ASSOCIATION VERSUS UNION OF INDIA (UOI) AND ORS. [ 2019 (7) TMI 1755 - SUPREME COURT] was whether a private agreement entered into between the appellant and the second respondent in the form of the constitution and bye-laws of the later could, by conferring exclusive jurisdiction on the courts of a particular place, oust the writ jurisdiction of a High Court which does not have territorial jurisdiction over the courts of that particular place, under Article 226 of the Constitution of India. It ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases where the orders are passed by tribunals or authorities without jurisdiction or by assuming jurisdiction where their exists none or in excess of their jurisdiction by crossing the limits of jurisdiction or by refusing to exercise jurisdiction vested in them or acting illegally or improperly in exercise of their jurisdiction causing grave miscarriage - It is not the case of the petitioner that the Demand-cum- Show Cause Notice was issued beyond the period of five years from the relevant date, thereby, making it a case as one without jurisdiction. Rather, it is the case of the petitioner that the Adjudicating Authority had issued the Demand-cum-Show Cause Notice by illegally extending the period of thirty months to five years. Having regard to the fact situation obtaining in the case in hand, the Appellate Tribunal can very well examine whether the petitioner was given adequate notice or was afforded adequate opportunity or a fair hearing in the proceedings before the Adjudicating Authority and/or before the first Appellate Authority. The contention of the petitioner as regards non-consideration of its Letter dated 15.09.2023 is also to be considered from the above perspective. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y[A]/COM/ST/GHY/2023 ['the Order-in-Appeal', for short] dated 21.09.2023 of the respondent no. 2 [hereinafter referred to as 'the Appellate Authority', for easy reference], the appeal preferred by the petitioner as the appellant under Section 85 of the Finance Act, 1994 against the Order-in-Original was dismissed, thereby, upholding the Order-in-Original passed by the Adjudicating Authority. 2. It has been stated that the petitioner, M/s Brahmaputra Television Networks is a proprietorship firm having its registered office at Guwahati. It is mentioned that the petitioner is engaged in providing taxable service in the nature of 'advertising agency services' since the year 2000 and as part of its business, it provides advertising services to the State Government agencies and private parties. For the purpose of Service Tax, the petitioner had got itself registered with Service Tax Code [STC] Registration no. ATTPS7285FST001 with VAT Registration Certificate no. GRN18530220383. Subsequently, after coming into effect of the Goods and Services Tax [GST] Act, 2017 on and from 01.07.2017, the Service Tax registration and the VAT registration of the petitioner have been migrated to the GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived monetary considerations and made required declarations under various sections of the Income Tax Act, 1961 relating to provision of services and TDS deductions. Those were found reflected in the Income Tax Returns of the noticeeassessee but the noticee-assessee did not declare those receipts against provision of services in the periodic ST-3 returns for the Financial Year : 2015-2016. It was mentioned that the same had resulted into non-payment/short-payment of Service Tax. 3.3. As per the contents of the Demand-cum-Show Cause Notice, it appeared to the Adjudicating Authority that the noticee-assessee had rendered taxable services under Section 65B of the Finance Act, 1994 and it had mis-declared the actual value of services provided and corresponding Service Tax liability in its periodic ST-3 returns. Post introduction of Negative List regime in the Service Tax, which became effective from 01.07.2012, the services provided by the noticee-asssessee fell under the definition of 'Service', defined under Section 65B [44] of the Finance Act, 1994, as any activity carried out by a person for consideration and included declared service. Mention was also made to the effect that as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding cess amounting to Rs. 1,34,54,383/- under Section 73 [2] of the Finance Act, 1994, by rejecting the grounds urged on behalf of the petitioner. The Adjudicating Authority had ordered payment of interest on the afore-mentioned confirmed amount at the rates applicable in terms of Section 75 of the Finance Act, 1994. In addition, the Adjudicating Authority had also imposed a penalty of Rs. 1,34,54,383/- in terms of Section 78 of the Finance Act, 1994. The Adjudicating Authority had further imposed a penalty of Rs. 10,000/- in terms of the provisions contained in Section 77 of the Finance Act, 1994 for alleged failure on the part of the petitioner to furnish information and produce documents requisitioned by the departmental authorities. The Adjudicating Authority while confirming as above, had given an option to the noticee-assessee, that is, the petitioner to pay reduced penalty equivalent to 25% of the amount of the penalty imposed under Section 78 of the Finance Act, 1994, subject to the condition that the noticee-assessee would have to deposit the amount of Service Tax and cess confirmed under Section 73 along with interest in terms of Section 75 and penalty under Section 77 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01/ST/3rd party/IID/20 dated 04.09.2020 for ascertaining the petitioner's actual Service Tax liability during the Financial Year : 2015-2016. In that connection, the Adjudicating Authority had also recorded that the petitioner had failed to submit the documents till the date of issuance of the Demand-cum-Show Cause Notice. It has been contended that no such Letter dated 04.09.2020 was ever served on the noticee-assessee [the petitioner]. It has, thus, been urged that had such Letter been received by the petitioner, the petitioner could have responded to such a Letter appropriately and no occasion for issuance of the Demand-cum-Show Cause Notice would have arisen. 6.2. As regards the obligation on the part of the Adjudicating Authority to issue such a Letter dated 04.09.2020 prior to issuance of any Demand-cum-Show Cause Notice under Section 73 [1], Mr. Das has referred to Section 83 of the Finance Act, 1994 whereby certain provisions of the Central Excise Act, 1944 including Section 14 thereof, have been made applicable in relation to Service Tax. By referring to the provisions of Section 14 of the Central Excise Act, 1944, he has submitted that the officer empowered to issue the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Year : 2015-2016, and the periodical ST-3 returns filed in the Year : 2015-2016 were very much within the knowledge of the respondent authorities. Therefore, the allegation of suppression of facts brought by the respondent authorities against the petitioner is wholly misconceived, without any basis and without any jurisdiction. It has been submitted that the allegation of differential taxable amount, Rs. 9,27,88,851/-, brought in by the respondent authorities against the petitioner, is baseless and erroneous as the petitioner had already paid the VAT against the said amount of Rs. 9,27,88,851/-. If the petitioner is penalized despite paying the VAT, it would amount to double taxation which, in turn, would cause serious prejudice. 6.6. It has been further contended that when during the course of the proceedings before the Appellate Authority the petitioner as the appellant submitted an application on 15.09.2023 seeking time to produce a vital document in support of the case of the petitioner-appellant, the Appellate Authority without considering the said application, had proceeded to pass the Order-in-Appeal on 21.09.2023. Not granting time to the petitioner-appellant to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sought to avert by filing this writ petition, it is not open for the petitioner to raise any further plea as regards nonreceipt of the Letter dated 04.09.2020. For not raising any objection as regards non-receipt of the Letter dated 04.09.2020 at the time of submitting its Reply on 17.02.2022 during the original proceedings the petitioner is precluded from raising it again by the doctrine of waiver and acquiescence. 7.2. It is further contended that reference to the provisions of Section 14 of the Central Excise Act, 1944 and Section 83 of the Finance Act, 1994 is misconceived and untenable as the said provision has not cast any obligation on the Adjudicating Authority to issue any kind of notice prior to issuance of any Demand-cum-Show Cause Notice under Section 73 [1] or under the proviso to sub-section [1] of Section 73 of the Finance Act, 1994. 7.3. On the issue of requirement to serve a notice/summon of the nature contemplated in Section 14 of the Central Excise Act, 1944 as a precursor to the Demand-cum-Show Cause Notice under Section 73 [1] of the Finance Act, 1994, Mr. Keyal has contended that such a requirement is not mandatory in view of the clarificatory instruction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST has referred to the following decisions of the Hon'ble Supreme Court of India to buttress his contentions :- [i] Thansing Nathmal vs. the Superintendent of Taxes, Dhubri and others, reported in AIR 1964 SC 1419. [ii] The Commissioner of Income Tax and others vs. Chhabil Dass Agarwal, reported in [2014] 1 SCC 603; [iii] M/s South Indian Bank Ltd. and others vs. Naveen Mathew Philip and another, reported in [2023] 4 SCR 18; [iv] PHR Invent Educational Society vs. UCO Bank and others, reported in [2024] 4 SCR 541; [v] Writ Appeal no. 188/2022 [M/s Sailaja Commercial Construction Private Ltd. vs. the Union of India and others], decided on 20.02.2023, by a Division Bench of this Court; and [vi] W.P.[C] no. 6942/2023 [Smti. Ajitha Krishnan vs. Union of India and others], decided on 04.12.2023, by a Single Bench of this Court. 10. I have given due consideration to the submissions made by the learned counsel for the parties. I have also gone through the materials available on record; the written synopses submitted by the learned counsel for the parties; and the decisions cited at the Bar by the learned counsel for the parties in support of their contentions. 11. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit petition or not. One of the self-imposed restrictions on the exercise of power under Article 226 that has evolved through judicial precedents is that the High Courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. At the same time, it is required to be remembered that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the High Court under Article 226 has not been pursued, would not oust the jurisdiction of the High Court and render a writ petition 'not maintainable'. Availability of an alternative remedy does not operate as an absolute bar to the 'maintainability' of a writ petition. It has, thus, been observed that 'entertainability' and 'maintainability' of a writ petition are distinct concepts. While an objection to the 'maintainability' goes to the root of the matter, the question of 'entertainability' is entirely within the realm of discretion of the High Courts. Being otherwise maintainable, it has been enunciated, dismissal of a writ petition by a High Court on the ground that the petitioner has not availed the alternative remedy, without examini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perintendent of Taxes, Dhubri and others, AIR 1964 SC 1419, was the Assam Sales Tax Act, 1947, which had provided a hierarchy of taxing tribunals competent to decide question as to the liability of the taxpayer under the said Act, with a right to have questions of law arising out of the order decided by the jurisdictional High Court. It is in the above fact situation, the Constitution Bench in Thansingh Nathmal [supra] has observed as under :- 7. ……The jurisdiction of the High Court under Article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the Articles. But the exercise of the jurisdiction is discretionary: it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self-imposed limitations. Resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1958 SC 86; Titaghur Paper Mills Co. Ltd. vs. State of Orissa, [1983] 2 SCC 433; Harbanslal Sahnia vs. Indian Oil Corpn. Ltd., [2003] 2 SCC 107; and State of H.P. vs. Gujarat Ambuja Cement Ltd., [2005] 6 SCC 499]. 12. The Constitution Benches of this Court in K.S. Rashid and Sons vs. Income Tax Investigation Commission, AIR 1954 SC 207; Sangram Singh vs. Election Tribunal, Kotah, AIR 1955 SC 425; Union of India vs. T.R. Varma, AIR 1957 SC 882; State of U.P. vs. Mohd. Nooh, AIR 1958 SC 86; and K.S. Venkataraman and Co. [P] Ltd. vs. State of Madras, AIR 1966 SC 1089, have held that though Article 226 confers a very wide powers in the matter of issuing writs on the High Court, the remedy of writ is absolutely discretionary in character. If the High Court is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere, it can refuse to exercise its jurisdiction. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of the principles of natural justice or the procedure required for decision has not been adopted [See : N.T. Veluswami Thevar vs. G. Raja Nainar, AIR 1959 SC 422; Municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Registrar of Trade Marks, [1998] 8 SCC 1; Tin Plate Co. of India Ltd. vs. State of Bihar, [1998] 8 SCC 272; Sheela Devi vs. Jaspal Singh, [1999] 1 SCC 209; and Punjab National Bank vs. O.C. Krishnan, [2001] 6 SCC 569]. 14. In Union of India vs. Guwahati Carbon Ltd., [2012] 11 SCC 651, this Court has reiterated the aforesaid principle and observed : [SCC p. 653, para 8] 8. Before we discuss the correctness of the impugned order, we intend to remind ourselves the observations made by this Court in Munshi Ram vs. Municipal Committee, Chheharta, [1979] 3 SCC 83. In the said decision, this Court was pleased to observe that : [SCC p. 88, para 23]. 23. … [when] a revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all the other forums and modes of seeking [remedy] are excluded. 17. In the 3-Judge Bench decision in M/s Magadh Sugar & Energy Ltd. vs. the State of Bihar & Others, reported in [2021] 9 S.C.R. 284, the observations are made in the following manner :- 19. While a High Court would normally not exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with. The principle of alternate remedies and its exceptions was also reiterated recently in the decision in Assistant Commissioner of State Tax vs. M/s Commercial Steel Limited [Civil Appeal No. 5121 of 2021]. In State of HP vs. Gujarat Ambuja Cement Ltd, reported in [2005] 6 SCC 49, this Court has held that a writ petition is maintainable before the High Court if the taxing authorities have acted beyond the scope of their jurisdiction. This Court observed : 23. Where under a statute there is an allegation of infringement of fundamental rights or when on the undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess can be the grounds on which the writ petitions can be entertained. But normally, the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eously refunded by reason of : [a] fraud; or [b] collusion; or [c] wilful mis-statement; or [d] suppression of facts; or [e] contravention of any of the provisions of Chapter V of the Finance Act, 1994 or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the Service Tax or his agent, the provisions of the sub-section shall have effect, as if, for the words 'thirty months', the words 'five years' have been substituted. 22. Reference has been made from the end of the petitioner to the provisions contained in Section 83 of the Finance Act, 1994. By Section 83 of the Finance Act, 1994, a number of Sections of the Central Excise Act, 1944, as in force from time to time, are made applicable, so far as may be, in relation to Service Tax as they apply in relation to a duty of excise. Section 14 of the Central Excise Act, 1944 is one of the Sections made applicable to the Finance Act, 1994. 22.1. Section 14 of the Central Excise Act, 1944 has provided for a power to summon persons to give evidence and produce documents in inquiries under the Central Excise Act, 1944. As per sub-section [1] of Section 14, any Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been clarified that a pre-show cause notice consultation shall not be mandatory for those cases booked under Chapter V of the Finance Act, 1994 for recovery of duties or taxes not levied or paid or short paid or erroneously refunded by reason of [a] fraud; or [b] collusion; or [c] wilful mis-statement; or [d] suppression of facts; or [e] contravention of any of the provision of Chapter V of the Finance Act, 1994 or the rules made thereunder with the intent to evade payment of duties or taxes. 23. Reverting back to the facts of the case in hand, it is noticed that the Adjudicating Authority in the Demand-cum-Show Cause Notice had recorded that the noticee was asked to submit certain documents vide Letter no. C. No. IV[18]01/ST/3rd party/IID/20 dated 04.09.2020 for ascertaining the noticee's actual Service Tax liability during the Financial Year : 2015-2016. It was further recorded that the noticee failed to submit those documents till the date of issuance of the Demand-cum-Show Cause Notice. It has been argued that no such Letter dated 04.09.2020 prior to the Demand-cum-Show Cause Notice was ever received by the petitioner. It has, thus, been contended that recording of the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the original proceedings and a writ proceeding is not considered so, the issue as to whether a fact which was not controverted or traversed in any manner initially, can be raised in appeal subsequently or not, or the petitioner is precluded to raise such issue by operation of the doctrine of waiver and acquiescence, can very well be gone into by the appellate forum as it can go into issues of law also. The recourse is very well available for the petitioner to approach under Section 86 of the Finance Act, 1994 in the case in hand. 24. Ordinarily, a Demand-cum-Show Cause Notice under sub-section [1] of Section 73 for recovery of Service Tax not levied or paid or has been short-levied or short-paid or erroneously refunded is to be issued within a period of thirty months from the relevant date. By the proviso to sub-section [1], the Adjudicating Authority has been empowered to issue a Demand-cum-Show Cause Notice within a period of five years from the relevant date, if any of the grounds mentioned therein is found to exist. Sub-section [6] of Section 73 has provided the meaning of 'relevant date' for the purpose of Section 73. As per Section 73 [6] [i] [a], 'relevant date' me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the petitioner that the Adjudicating Authority had issued the Demand-cum-Show Cause Notice by illegally extending the period of thirty months to five years. 27. Having regard to the provision contained in sub-section [1] and in the proviso to subsection [1] of Section 73 of the Finance Act 1994, it cannot be said that the Adjudicating Authority does not have the jurisdiction to issue a Demand-cum-Show Cause Notice within a period of five year from the relevant date if he has reasons to believe that any of the grounds mentioned therein exists and as a result, any Service Tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded. In the present case, while invoking the power to extend the period to five years from the relevant date, the Adjudicating Authority had recorded in the Demand-cum-Show Cause Notice dated 26.04.2021 the reasons as to why the case, according to it, is a case of wilful suppression of facts and short-payment of Service Tax to invoke the power under the proviso. The Adjudicating Authority had specifically referred to information/data collected from the Income Tax Department pertaining to considerations received from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle Bench has held the view that a mere mechanical reproduction of the language of the proviso to Section 73 [1] of the Finance Act, 1994 does not per se justify invocation of the extended period of limitation. The notice must contain particulars of facts and circumstance in support of such allegation. The Court has found that the Department initiated an enquiry and issued letters to the petitioner from time to time and the petitioner was found diligent in responding to all the letters issued by the Department. It was in such backdrop, the learned Single Bench has reached the view that there appears to be no basis in the Department's contention that the petitioner suppressed material facts with an intent to evade payment of Service Tax. On perusal, the fact situation obtaining in Simplex Infrastructure Limited [supra], with respect, is not found similar to the fact situation obtaining in the case in hand. 30. As discussed above, the matter of issuance and service of the Letter dated 04.09.2020 is a disputed one. In view of the contention raised, a reference to the relevant parts of Section 73 of the Finance Act, 1994 appears necessary. Sub-clause [c] of sub-section [1] of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner was given adequate notice or was afforded adequate opportunity or a fair hearing in the proceedings before the Adjudicating Authority and/or before the first Appellate Authority. The contention of the petitioner as regards non-consideration of its Letter dated 15.09.2023 is also to be considered from the above perspective. Since this Court is of the considered view that neither the Order-in-Original nor the Order-in-Appeal has been passed in total violation of the principles of natural justice, the petitioner has not been able to make out an exceptional case on this point for entertaining the present writ petition. 32. In Kellogg India Private Limited [supra], a show cause notice was issued to the writ petitioner calling upon them to show cause as to why their product 'Chocos' should not be classified under Chapter sub-heading no. 1084.00 of the Tariff Act and the classification declaration filed under Rule 173B of the Central Rules, 1944. After submission of a reply by the petitioner, the Adjudicating Authority passed an Order-in-Original. The petitioner unsuccessfully carried an appeal before the Commissioner [Appeals]. After rejection of the appeal by the first appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. A contention was advanced on behalf of the writ petitioner/writ appellant that a statutory pre-deposit was required to be made for filing an appeal and thus, the remedy was not efficacious. Such contention has been held by the Hon'ble Division Bench to be unworthy of credence because mere requirement of furnishing or making the pre-deposit with the appeal under the Goods and Services Act would not make the remedy inefficacious. It has been held that the remedy of appeal is an efficacious statutory remedy and ordinarily, the writ jurisdiction should not be invoked to examine the validity of a demand notice, if none of the exceptions curved out by the Hon'ble Supreme Court in its decision is made out. 34. It is noticed that against an order like the Order-in-Appeal no. 528/GHY[A]/COM/ST/GHY/2023 dated 21.09.2023, an appeal lies under Section 86 of the Finance Act, 1994 to the Customs, Excise and Central Tax Appellate Tribunal and such appeal is required to be filed within three months from the date on which the order sought to be appealed against has been communicated. Sub-section [5] of Section 86 has provided that the Appellate Tribunal may admit an appeal after the expiry of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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